Kim Hyun-ki, Chairman of the Council of Chairpersons of Provincial and Metropolitan Councils of the Republic of Korea, Holds the ‘2023 1st Extraordinary Meeting of the Council of Chairpersons of Provincial and Metropolitan Councils of the Republic of Korea’ in Ulsan on the 26th
12 agenda items including a proposal urging ‘National Government Support for Losses from Free Rides on Urban Rail Transit’ approved... Free ride losses account for about 41% of the 550.4 billion KRW in net losses of urban rail transit agencies nationwide over the past 5 years
[Asia Economy Reporter Park Jong-il] Kim Hyun-ki, Chairman of the Council of Chairpersons of Provincial and Metropolitan Councils of the Republic of Korea (Chairman of the Seoul Metropolitan Council), approved a proposal urging ‘National Government Support for Losses from Free Rides on Urban Rail Transit’ submitted by the Seoul Metropolitan Council, Gwangju Metropolitan Council, and Daegu Metropolitan Council on the 26th.
Chairman Kim Hyun-ki held the 1st extraordinary meeting of the Council of Chairpersons of Provincial and Metropolitan Councils of the Republic of Korea in Ulsan on the same day. A total of 12 agenda items submitted and approved by provincial and metropolitan councils nationwide were discussed as urgent matters to advance the era of local autonomy.
The main approved agenda items include ▲ Proposal urging national government support for losses from free rides on urban rail transit ▲ Proposal urging institutional improvements to protect the rights of mandatory reporters of child abuse crimes ▲ Proposal urging the enactment of a law on the employment and support of foreign seasonal workers ▲ Proposal urging institutional improvements in the administration of development-restricted zones, among others.
Chairman Kim Hyun-ki, who submitted the ‘Proposal urging national government support for losses from free rides on urban rail transit,’ stated, “Of the average annual net loss of 1.3509 trillion KRW incurred by urban rail transit operators nationwide over the past five years (2017?2021) due to legally mandated free rides introduced by government policy in 1984, losses from free rides amount to 550.4 billion KRW, accounting for about 41%. This level of loss is difficult to bear solely with local government finances. However, the government only provides national funding to Korea Railroad Corporation for free ride losses and does not support local governments,” he pointed out.
Chairman Kim explained, “When the legally mandated free ride policy was first applied in 1984, the proportion of the population aged 65 and over nationwide was only 5.9%, but it is expected to reach 20.6% in 2025 and 40.1% in 2050, so losses from free rides on urban rail transit will continue to place a heavy financial burden on local governments.”
Currently, in Seoul, the basic subway fare has remained unchanged for eight years since it was raised from 1,050 KRW in 2015 to 1,250 KRW. Due to population aging and reduced passenger revenue caused by COVID-19, the Seoul Metro, which operates the Seoul subway, recorded deficits of 1.1448 trillion KRW in 2020, 995.7 billion KRW in 2021, and 1.26 trillion KRW in 2022. About 30% of last year’s deficit was attributed to free rides.
With the failure to secure national government support for local governments’ losses from free rides in this year’s budget, a subway fare increase is anticipated.
Local governments including Seoul argue that since the free ride system for transportation-vulnerable groups was introduced under the president’s directive in 1984, the government should compensate for the loss costs.
Related local governments have repeatedly requested budget support from the government, but it has been rejected each time due to concerns over fiscal burden.
Chairman Kim Hyun-ki said, “Especially this year, with the economy in recession and the common people’s economy struggling, I hope for a magnanimous decision from the central government. When the voices of local governments are sufficiently reflected, the era of local autonomy where it is good to live anywhere in the Republic of Korea can also be realized.”
The main agenda items approved on this day will be delivered to the central government and related agencies.
The Council of Chairpersons of Provincial and Metropolitan Councils of the Republic of Korea is a consultative body composed of chairpersons of 17 metropolitan councils nationwide. It leads the development of local autonomy by promoting mutual exchange and cooperation among councils regarding local council operations and jointly working to improve unreasonable laws and systems.
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